Shanghai and Kuala Lumpur-based venture capital firm Gobi Partners is exploring opportunities to back startups in what it sees as two underserved areas — those serving Muslim consumers and companies founded by women entrepreneurs.
Thomas G. Tsao, founding partner of Gobi Partners, said the Muslim market was a big underserved market that VC firms need to seriously consider because of the vast opportunities it offers.
“If you look at one of the big underserved markets now, I believe it is the Muslim market. We are now looking for startups using technology to really serve Muslim consumers, businesses, and communities. This will create a lot of opportunities,” Tsao said during Crouching Panda, Hidden Tapir, an investment conference in Malaysia co-organized by Gobi Partners.
Tsao admitted that there is scepticism in the prospects the Southeast Asian market at the moment, but recalled how China was considered as an underserved market in 2002, with not a single VC doing investments in the country back then.
“When we set up Gobi in 2002, China was an underserved market because no one was doing venture capital in the country. But we believed that there was going to be homegrown innovation from China… You have to have a vision of what is possible,” he said during moderated by DEALSTREETASIA’s Joji Thomas Philip.
Another underserved market that VCs should tap are women-led startups, Tsao added. He said while Gobi Partners has already invested in women-led startups, the VC firm needs to do better.
About 24 per cent of Gobi’s portfolio companies in Asia are founded by women entrepreneurs but there is still much to be done when it comes to investing in women founders, Tsao said.
“That is a number that needs to go higher, but it is something that we are tracking. We all need to do a better job in investing in women entrepreneurs,” he added.
In general, Gobi Partners is seeing more funds coming into Southeast Asia and the fund sizes getting bigger.
“A couple of years ago, if you were raising a $100-million fund for Southeast Asia, it was considered sizeable. I think that bar continues to go up because the margin continues to get bigger and bigger,” Tsao said.
One of the interesting trends that Gobi has also noticed is that Silicon Valley has been absent from Southeast Asia, although Tsao stressed this highlights how strong the region’s VC ecosystem, which is helped by Northeast Asia, is.
“The future is exciting because a lot of the other global ecosystem players have not come to SEA yet but that is something that could happen,” he said.